Whether you are a business collecting debt or a collection agency, the process of collecting can be very tiring, as it is fraught with challenges because of the new regulations and the increasing inflation. In this blog, we will take a look at the challenges highlighted by a New York collection attorney.
The inflation:
With the increase in inflation, the cost of food and services is also on the rise. According to resorts, it has been recorded that there has been an increase in food prices by 10%. This is making it difficult for the consumer to clear their long overdue bills because there is a general lack of funds.
Changes in credit reporting:
In 2022, Equifax, Experian, and TransUnion made changes to the way that medical debts are shown on credit reports, including removing settled medical debt collections from credit reports and postponing reporting until 365 days after the initial delinquency date. As a response to the conclusions of the Consumer Financial Protection Bureau, medical accounts must have a minimum balance of $500 in order to be credit-reported as of March 30, 2023.
The collection agencies are not adapting:
The world is ever evolving- and with it, the collection agencies also need to change their ways of collecting. The collection agencies are not leveraging all the tools like texts, emails, and other phone technologies. Agencies have to understand the need to work with prominent telecom companies to safelist their numbers so that the consumers are not able to avoid their calls. There should also be a rotation of the caller ID numbers that are being used. In addition to this, collection firms should also employ analytics for call optimization.
Given the lack of adaptability, businesses that are going for collection agencies that are not keeping up with the trends, are bound to face challenges and fall behind.
Final thoughts:
It is for this very reason that small as well as big companies need to understand why they are falling behind and what the current challenges are surrounding debt collection. Once they get to the root of the challenges with appropriate help from collection agencies that are adapting to the changes, they will be able to make a positive impact on their businesses. If you want more information on the services provided, reach out to a New York collection agency today.
